In recent years, conducting stable business has become difficult in some jurisdictions due to political instability and certain financial obstacles. Entrepreneurs interested in working in the international economic space look for new markets and business solutions. The United Arab Emirates is well-known as an attractive jurisdiction for doing global business. In this article, we will describe a smart way to open a company in Dubai and start making a profit from such activities.

Dubai lies at the crossroads of busy international trade routes. It offers favorable taxation for hiring employees and zero social and personal income taxes. However, there is a way to start working in the Dubai market without hiring staff altogether. You can install a vending machine and then apply for a business license. In today’s UAE, the vending machine industry is gradually growing. The country has a strong economy and great tourist appeal. If you research the market and manage to choose a good location at a busy foot traffic point, you can find a lucrative place for your vending machine. Our expert team can provide support in registering a company in Dubai and launching your vending machine business in the UAE. 

Opening a business in the UAE: pros and cons 

Here are the most significant advantages of doing business in the UAE:

• Absence of Taxes: No taxes on capital increases, profit received, or deductions from employees’ salaries.
• Zero VAT Rate: No VAT when selling goods to countries outside the Gulf region (5% VAT in other cases).
• Stable Exchange Rates: Consistent currency values.
• Ease of Reporting: Simplified process for independent preparation of reporting documents.
• Tax Residency Certificate: Available after six months.
• Supportive Government: Favorable attitude towards business.
• Corruption-Free Environment: Absence of corrupt activities.
• Consulting Services: Wide range of consultants for business setup.
• Low Inflation Rate: Typically, between 2-7%.
• Safe Transactions: Contracts are registered with municipal authorities.
• Free Economic Zones: A variety of zones with conditions tailored to different activities.
• Developed Logistics: Well-established logistics infrastructure.
• Long-Term Visas: Business owners can obtain long-term visas for themselves, family members, and company personnel.

However, there are also disadvantages to doing business in Dubai:

• Bank Account Challenges: Thorough checks and difficulties for foreigners, including Russians, in opening a bank account.
• High Transparency Requirements: Strict requirements for business transparency.
• Intellectual Property Protection: Lack of comprehensive regulatory legislation on IP protection.
• Complex Registration Process: Limited use of the single window system complicates legal entity registration.
• Costly Document Processing: High expenses associated with processing documents.
• Expensive Rental Costs: Premises in desirable neighborhoods are costly, and some landlords demand a percentage of sales income in addition to rent.
• High Legal Fees: Costs for legal services in the UAE are comparatively quite high.
• Lengthy Project Approval: Prolonged procedure for project acceptance by municipal institutions and developers.

Benefits of Starting a Dubai Vending Machine Business 

Starting a vending machine in the UAE offers some specific advantages: The UAE vending machine market, valued at $85.66 million in 2022, is projected to grow at an annual rate of 14%, reaching $188.13 million by 2029. This growth is driven by customer preference for the convenience of vending machines over traditional purchasing methods. In Dubai, 74% of residents are under 40, a demographic that frequently uses vending machines and has significant purchasing power. 

Here is the summary of the essential advantages of owning a vending machine in Dubai:

• High foot traffic: Dubai’s bustling city life and growing tourism ensure plenty of high-traffic locations such as city streets, malls, train stations, and airports.
• Supportive business climate: Dubai’s regulatory environment is conducive to starting a vending machine business, with flexible registration options on the mainland or in Free Economic Zones. The tax incentives are generous, and long-term visas are available for business owners.
• Business scalability: You can begin with a few machines in strategic locations and gradually expand your network across the UAE.
• 24/7 revenue: Dubai’s continuous activity allows your vending machines to operate around the clock, providing consistent income with minimal effort and maintenance.
• Low initial investment with high returns: By starting with several affordable machines placed in busy areas, you can quickly achieve significant profits and a high return on investment.

Starting a vending machine business in UAE: the vital steps 

• Conducting market research:

• Study the UAE vending market and its trends.
• Develop a marketing strategy based on demographic insights and competitor analysis.
• Determine suitable products based on local preferences.
• Registering a company:

• Choose the type of company ownership (e.g., sole proprietorship or LLC).
• Apply for a vending machine license from the Department of Economic Development (DED).
• Obtain a vending machine permit containing the product types, installation locations, and safety requirements.
• Select a unique and memorable company name.
• Submit a company formation application to the DED with your passport and business plan for a one-year license.
• Applying for a UAE visa 

• Obtain a long-term visa needed to operate the vending machine business.
• Secure visas for family members and company personnel as required.
• Buying and installing the vending machines:

• Research and choose vending machines based on location, foot traffic, and market competition.
• Decide between large machines for high-traffic zones or smaller machines for testing.
• Select from various types:
  • Food and drink machines: Popular for selling soda, snacks, and other foods.
  • Single-item machines: Ideal for low starting investments. They are reliable and cost-effective, usually selling items like chewing gum or toys.
  • Specialized machines: These sell various products, from personal hygiene items to gadgets, and are typically located in busy areas, such as airports or malls.

You should also note the innovative use of vending machines in the UAE. Some of the machines distribute bread to those in need. Others are used to sell cupcakes, champagne, or even gold!

We encourage you to request advice and support from International Wealth experts to ensure a smooth business setup. We will help you select the right company ownership structure, optimize taxation, and secure a business license and a visa.